Carnegie Mellon University is trying to streamline technology transfer.
Carnegie Mellon University is trying to streamline technology transfer. Nationwide, university tech transfer fueled 450 businesses and 4,000 licenses in 2002. Yet the process of transferring innovation from college labs to the private sector remains byzantine, with start-ups and schools haggling over licensing and royalty deals. "It's hard to have a standard deal, since so much of the value is set by the marketplace," says Carol Mimura, of the University of California at Berkeley. Nevertheless, CMU has created the "5% and go in peace" solution. Start-ups grant CMU 5% of their equity and a 1% royalty for a nonexclusive license. Royalty payments are deferred for three years. Exclusivity costs an additional 1%. Since the plan was put in place, "the time it takes to negotiate licenses has decreased by 60%," says CMU's Robert Wooldridge.